Financial Services Minister Kelly O'Dwyer said in a joint statement with Treasurer Scott Morrison that the new reforms will “make the superannuation system fairer, more flexible and more sustainable”.

“The majority of Australians – 96 per cent of individuals with superannuation – will either be better off or unaffected as a result of these changes,” she said.

The new tranche will implement the $1.6 million transfer balance cap, limiting the amount a superannuation member can hold in the tax-free retirement phase, as well as lower the concessional contributions cap to $25,000 per year, Ms O’Dwyer said.

Additionally, Ms O’Dwyer noted that individuals with balances below $500,000 will be able to ‘carry forward’ their unused concessional cap space for up to five years in a bid to provide more flexibility to “those with broken work patterns”.

Transition to retirement schemes will also be affected, with the tranche outlining changes designed to prevent the system being used for tax minimisation; the anti-detriment provision will also be abolished under the new legislation.

“The Government remains on track to have these measures introduced into the Parliament before the end of the year,” Ms O’Dwyer added.

“This will provide taxpayers with certainty so they can make decisions about their savings and superannuation with confidence. With the support of the Senate, there will be no impediment to this occurring.”